Mobile call tariffs to fall as East African states scrap levies

Safaricom has said it will devise ways of tapping into the popularity of the WhatsApp messaging service to make money. Photo/AFP 

 

By OKUTTAH MARK

Call rates to Uganda, Rwanda and South Sudan are set to significantly reduce after East Africa states signed an agreement to repeal taxes charged on calls from the region.

On Thursday last week, the four heads of State signed an agreement scrapping the taxes introduced by Uganda, Tanzania, Rwanda and Burundi that escalated the calling costs.

Kampala and Kigali made a climb-down but demanded a study be conducted before the common termination rates are agreed on.  Kenya had insisted on an immediate scrapping of the taxes.

The Kampala meeting did not specify when the rates would come down. However, Communications Commission of Kenya director-general Francis Wangusi, who attended the meeting, said that this may happen in June after the national budgets.

In June, Uganda introduced Sh7, Tanzania Sh10, Rwanda Sh9 and Burundi Sh13 levy. This means any calls made by a Kenyan when roaming or directly calling from the country are subjected to the taxes.

Kenya is the only East Africa state that does not levy any taxes on cross-border calls and wants a common termination tariff introduced.

“We agreed to scrap roaming charges and eliminate surcharges for calls emanating in the region. The exact date for lowering the charges was not arrived at but this will happen since all the heads of state were in an agreement to this. It should be immediate but at the latest it will not go beyond the coming budgets,” Mr Wangusi told the Business Daily in a phone interview.

Roaming and international calling charges in East Africa are higher than those in Asia and Europe despite hot pursuit of economic and political integration. The high tariffs are partly informed by taxes and constitute a non-tariff barrier to trade.

READ: Uganda, Rwanda stall bid to scrap roaming charges

The taxes have made it expensive to call Uganda or Rwanda compared to calling the US or India. Safaricom charges 27.50 for calls to the two countries compared to Sh3 to India.

This situation is replicated in the Telkom Kenya network where calls to the UK cost as little as Sh2 per minute while subscribers calling Uganda are charged at least Sh18 per minute.